Ship recycling is about to change

By Gudrun Janssens, BIMCO Regional & Regulatory Manager, Intergovernmental Engagement

First published by Naftika Chronika of Greece

For decades, the ship recycling industry has been widely considered as an industry associated with pollution and dangerous conditions for the workers that depend on the income, and rightly so. And while there is still much to be done throughout the yards of Southeast Asia, the entering into force of the HKC has the potential to change the face of ship recycling.

Over the next decade BIMCO has estimated that over 15.000 ships will need to be recycled. This is more than double than the previous decade. As the HKC enters into force, to reach its full potential, conflicts between the HKC and the Basel Convention (BC) must be resolved, much more HKC compliant capacity is needed and so is the willingness of shipowners to use HKC compliant yards to support and fuel the business case.

The Basel Convention – not meant for ship recycling

The Hong Kong convention sets global standards for how end-of-life ships must be dismantled, and its scope extends beyond environmental considerations. The convention includes worker safety - an area not addressed by the BC - and acknowledges the continuous ownership of vessels throughout their lifecycle. Its entering into force represents the transformation of an industry that is facing its greatest tests and greatest opportunities in the history of ship recycling. 

The existing conflict between the HKC and the BC is one such test. The opportunities are many.
Starting with some of the issues that will test how fast progress can be made, the shipping and recycling industries were hoping for some of the conflicts between the two conventions to be resolved at the recent Basel COP. 

Since this failed, we are now facing another two years allowing states that are party to the BC to get their heads around the co-existence of the two conventions. This is despite the fact that the HKC has been on the table since 2009 and should have provided enough time to prepare for the convention entering into force.

At the Basel COP, some of the challenges and tests that lie ahead were once again highlighted. Firstly, states that are party to the BC acknowledged that the BC does not – and has not – worked for the recycling of ships.

Secondly, it was once again highlighted how some states and observers at Basel are convinced that a ship can be considered “a ship” and “waste” at the same time. In practice, this is not possible. This is a problem because if a ship is “waste” from the moment it is intended to be recycled, and the BC is to apply, the ship can no longer trade and act as a ship. This interpretation contrasts with the HKC which takes a life-cycle approach. Similar interpretations do not exist in the automotive or aerospace sectors for good reasons. 

Thirdly, it is a problem that the debate at Basel COP is run by representatives of states that have a lot of expertise on waste, but none of shipping. Moreover, there is a lack of accountability in cases when states or observers use outdated or factually incorrect arguments. 

While we had some hope that the outcome of the Basel COP would provide a decision on whether the HKC or the BC would take precedence, there was no agreement. This is despite years of proof that the BC has not been successful in banning substandard ship recycling or having a positive impact on the shipping and ship recycling industries. On the other hand, the HKC has already had a positive impact, even ahead of its entry into force.

In addition, as the HKC enters into force, end-of-life ships that are in full compliance with HKC, risk being detained in ports for violating the BC. Such legal conflicts risk slowing progress for the yards that are committed to providing safe jobs and environmentally sound recycling of ships.

Co-ordinating the efforts of shipping and ship recycling

At BIMCO, we have championed efforts to achieve greater legal clarity on the interplay between the two conventions. We believe it is essential for governments to reassess their positions and weigh the merits of each convention, not as competing entities but as complementary instruments. Together, the two conventions can serve the broader objectives of environmental protection and sustainable ship recycling, and we have already seen standards being improved by the HKC.
From BIMCO's perspective, the HKC is instrumental in aligning international standards with the complexities of the global shipping and ship recycling industry. The HKC is pivotal in ensuring the sustainable recycling of ships, minimising environmental harm and providing safe jobs. Working towards this goal, we noted that the ship recycling industry increasingly worked towards those same goals, so we decided to establish the BIMCO Ship Recycling Alliance at the end of last year. 

The aim of the alliance is to help fuel change by co-ordinating the voices of the ship recycling industry and the shipping industry and help facilitate the global implementation of the HKC. Members of the alliance include representatives from shipping companies, class societies, ship recycling associations, facilities and cash buyers, among others.

Ships are not waste; they are a resource.

As the date approaches for the HKC to enter into force, we believe the stories of the recycling yards that are dedicated to upgrading and investing in safe and environmentally sound ship recycling deserves a place on the EU ship recycling list and in the public debate. We also believe that as more and more ships head for HKC compliant recycling, it is time to regard them not as waste but as a resource. The potential for adding to the circular economy is tremendous but recycling must be done responsibly.

It will take huge efforts to raise the standard of yards throughout the Southeast Asia region, but there are many stakeholders that share the same goals and many nation states that ratified the HKC. 

At BIMCO, we believe that as we approach 26 June, it is time to not only look back but to start looking forward. The HKC has the potential to change the face of ship recycling, support the circular economy and provide safe jobs to the people that need them. We believe now is the time to do we have all signed up for and that this industry must never go back to the substandard recycling that flourished under the BC. The solution is here, and it is about to enter into force.